Next steps in Mighty River Power IPO

Finance
Minister Bill English and Minister for State Owned
Enterprises Tony Ryall will tomorrow officially launch the
pre-registration period for New Zealanders who are
interested in finding out more about the Mighty River Power
share offer.

“National campaigned on this policy at the
election in 2011 and it has been extensively discussed
before and since then,” Mr English says.

“It has been
through the High Court and the Supreme Court where the
Government has won both cases and now, at last, it’s time
to get on with it.”

Mr English says the initial public
offering of up to 49 per cent of the Government-owned power
company is an opportunity for New Zealanders, including
those who have not owned shares before, to invest in the
stockmarket.

The announcement that the pre-registration
period will begin tomorrow is one of the decisions confirmed
by Cabinet and announced today. Pre-registration will allow
New Zealand retail investors who are interested in finding
out more about Mighty River Power shares to register their
interest.

“Tomorrow will also see the start of a
substantial advertising and communications campaign covering
television, print and online media which will raise
awareness of the IPO, and tell people how to
pre-register,” Mr English says.

“That campaign will
include a strong investor education element for those
unfamiliar with the sharemarket. We strongly recommend
investors obtain their own independent financial
advice.”

Ministers also announced today that they expect
that the share offer document will be lodged shortly after
the pre-registration period ends and that there will be a
three-week offer period.

At the end of that, the
book-building process will take place before ministers
decide on the share price and the allocation of shares.
Those decisions will include how the shares will be
allocated between New Zealanders and overseas
shareholders.

The Government expects this process to be
completed in mid-May.

The share offer had been designed to
put New Zealanders first, Mr Ryall says.

“Mighty River
Power will apply to be listed on the NZX main board. We
expect that its primary stock exchange listing will be in
New Zealand.

“We also expect it to have a secondary
listing on the Australian Stock Exchange. There is nothing
at all unusual about this – eight of the 10 largest New
Zealand listed companies are already dual listed in
Australia.

“There is a balance to be struck here. On the
one hand, we have given New Zealanders an absolute
commitment that Kiwis will be at the front of the queue for
shares.

“On the other hand, we want to ensure there is
enough tension in the share price for investors. A secondary
listing in Australia will help to achieve that.

“Another
point worth noting is that some Australian institutions,
under their own investment mandates, would not be able to
invest in Mighty River Power unless it was also listed in
Australia.”

Mr Ryall says the website for
pre-registration and for the share offer itself has been
designed to restrict people from outside New Zealand from
participating.

However, the IPO will be open to certain
institutional offshore investors because that will help
ensure New Zealand taxpayers get the best price for the
shares being sold. Ministers expect around 85-90 per cent of
shares to be held by New Zealanders after the share
offer.

Other decisions confirmed today include:• The
minimum application for shares will be $1000, increasing in
$100 increments.• New Zealanders applying for up to
$2000 worth of shares will not be scaled back if the IPO is
over-subscribed.• A loyalty bonus will apply for New
Zealand retail investors who keep their shares for a minimum
period. The terms of that bonus will be announced before the
share offer opens.

Mr Ryall said more details about the
pre-registration process will be announced
tomorrow.

Mighty River Power share offer – media
Qs and As

What are you announcing
today?

The Government will offer the public a minority
stake in Mighty River Power in the second quarter of this
year, subject to market conditions.

To start that process,
a pre-registration period for New Zealanders will commence
tomorrow.

What is
pre-registration?

Pre-registration is an
obligation-free opportunity to express interest in buying
Mighty River Power shares. New Zealanders who pre-register
will be informed when the share offer opens and be provided
with an offer document (either hard copy or via
email).

Pre-registration is free and does not mean you
have to apply for shares.

If I pre-register do I have
to apply for Mighty River Power shares?

No.
Pre-registration does not oblige you to apply for Mighty
River Power shares. You should make your investment decision
only after carefully considering the information contained
in the offer document, once it becomes
available.

Pre-registration simply lets us know you are
interested, and helps us to give you access to the offer
document when it is available.

Who can
pre-register?Pre-registration is only available to
New Zealanders.

In order to qualify as a New Zealand
applicant, you must supply, as part of your application for
shares in Mighty River Power (when the share offer is open),
a:

1. Valid IRD number; and2. Valid New Zealand bank
account; and3. New Zealand address; and4. A
declaration that you are a New Zealand citizen or permanent
resident in New Zealand.

If you don't have an IRD number
or bank account you should arrange for these now before the
share offer opens.

Institutional investors are not
eligible to pre-register.

If you are considering applying
for Mighty River Power shares on behalf of your children or
grandchildren you will need to make sure they have their own
IRD number and bank account.

When can I
pre-register?You can pre-register from Tuesday 5
March to 22 March 2013.

How do I
pre-register?You can do that via the website or a
call centre. Details will be released on 5 March.

Who
will be able to apply for Mighty River Power
shares?The Mighty River Power share offer will be
open to New Zealand Applicants. Institutional investors in
New Zealand and certain other jurisdictions will also be
able to apply. Once the share offer opens, you will be able
to apply online on the website or by using the paper
application form in the offer document.

You will not need
a broker to be able to apply for shares. However, if you
seek advice from a broker in relation to the Mighty River
Power share offer, you should not have to pay
brokerage.

How much will Mighty River Power shares
cost?The price of Mighty River Power shares has not
yet been determined. Details of the share offer, including
how the price will be set, will be contained in the offer
document, which is expected to be publicly available in
April 2013. The minimum application amount will be
NZ$1,000.

When will the Mighty River Power share offer
open?The Crown has not yet decided on the final date
of the Mighty River Power share offer. When that decision is
made, New Zealand investors will be informed of the timing
of the share offer and the process by which they can apply
for shares. The final decision will be subject to market
conditions.

The Mighty River Power offer document will be
publicly available within New Zealand following its
registration with the Registrar of Financial Service
Providers and the share offer is expected to open one week
later.

What is the Order in Council
process, and why are you doing it now?Before the
sale of shares can commence, Mighty River Power needs to
cease being a State Owned Enterprise and become a MOM
company. This is done by removing it from the SOE Act (and
placing it under the Public Finance Act) – which is what
the Order in Council will do.

Only Mighty River Power is
being removed at this time. The legislation was deliberately
drafted so that companies can be separately removed from the
SOE Act and floated.

The Order itself will come into force
on 8 March 2013 (the day after the date of its notification
in the New Zealand Gazette).

What is the yet-to-settle
Iwi proposal? Who gets it and why?This policy was
announced on 17 October 2012. It gives Iwi groups yet to
complete their Treaty settlements the opportunity to
participate in the Government share offer programme.

Iwi
yet to settle their claims can choose to receive a
percentage of their forecast settlement package “on
account” in the form of shares. Subject to meeting the
criteria for eligibility, they will be able to buy ordinary
shares at the IPO price, on the understanding that the
purchase forms part of their overall settlement
package.

Important
noticeThe Crown is considering offering shares to
the public in Mighty River Power Limited (“Mighty River
Power”). No money is currently being sought and no
applications for shares will be accepted or money received
until after an investment statement containing information
about the offer of shares is available (the "Share Offer
Document"). It is intended that an application will be made
to NZX Limited (“NZX”) to list Mighty River Power on the
NZX Main Board. The application will be made closer to the
time that shares in Mighty River Power are offered to the
public. No such applications have yet been made.

The
contents of this press release are not permitted to be made
available to persons in any country other than New Zealand.
Mighty River Power's shares have not been and will not be
registered under the United States Securities Act of 1933,
as amended (the "United States Securities Act") or the
securities laws of any state of the United States and may
not be offered or sold in the United States unless the
shares are registered under the United States Securities
Act, or an exemption from the registration requirements of
the United States Securities Act and applicable United
States state securities laws is
available.

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